The Medi-Cal Waiver: Signficant Changes for Patients, Providers and Public Hospitals

Late Thursday night, California lawmakers approved a large expansion of indigent health care services. The expansion comes through the Medi-Cal waiver bill, which in many ways, is akin to a five year, 10 billion dollar road map for the program.

Late Thursday night, California lawmakers approved a large
expansion of indigent health care services. The expansion comes
through the Medi-Cal waiver bill, which in many ways, is akin to a
five year, 10 billion dollar road map for the program.
The funding comes from the federal government.

This waiver shifts seniors, children with disabilities, and
other special need indigent patients to HMO-style,
managed care programs. Currently, Medi-Cal pays most of these
patient's claims in what's known as fee
for service.

Lawmakers passed the Medi-Cal waiver as a federal deadline of
October 31st loomed. Governor Arnold Schwarzenegger, and
U.S. government regulators, still need to approve the waiver.

The waiver bills were passed with little opposition, with the
notable exception of Hector De La Torre (D-South Gate). The
Assembly Health committee member says there are few guarantees in
the waiver bill that patients who are switched to managed care
providers will be able to keep their current doctors and
specialists.

On Thursday, De La Torre took the Assembly floor and told his
colleagues that despite the pressure to approve the waiver, he
couldn't vote for the bill.

"Now, under the guise of a budget deal, we are being asked to
vote on this thing. I can't do it, because those protections are
not here for those patients," De La Torre argued.

"We can't let the perfect be the enemy of the
good."

Assembly Health Committee Chair Bill Monning (D-Carmel)
spoke in favor of the waiver on the floor. He rebuffed De La
Torre's criticism, telling his colleagues, "We can't let the
perfect be the enemy of the good."

"If we do not support this bill, California is going to go into
a deeper debt crisis and the victims will be the very people my
friend wants to protect," Monning told his Assembly colleagues.

For much of this session, as the bill went through Monning's
committee and others, the bill lacked specifics and substance. Much
of the testimony on what was essentially a waiver 'shell-bill'
concluded with speakers waiting to reserve judgment until more
details were available.

It was only later in the session, as an earlier deadline loomed,
that hard facts emerged.

One of those key details: That the shifting of patients from fee
for service to HMO style care would save the state an estimated 200
million dollars a year.

An Expansion to Every County as a Bridge to
2014

Another significant change is that the waiver would send more
money to all counties so they can cover more indigent people until
Medi-Cal is expanded dramatically in 2014, when the full federal
health care law passed earlier this week takes effect.

Currently, 10 counties offer health care plans. The waiver would
give the option to the other 48 counties to offer similar plans, if
they chose.

One of the concerns for Ingrid Lamirault is that if the waiver
passes, there could be a shortage of doctors who accept Medi-Cal
via the HMO's. Lamirault is the CEO of the Alameda Alliance for
Health, a county based health care manager. Lamirault estimates
there could be an increase of at least 25,000 people in the AAH
network looking for local doctors that accept the plan.

"[We are working to] convince [doctors] to contract with us and
to be part of the network with us and the Medi-Cal network and the
network for indigent care. And then look for efficiencies in the
system so we can find out what the real gap is," Lamirault
said.

Meanwhile, because each county will have flexibility to
implement the program, state officials are unclear just how many
enrollees could end up joining the program.

Public Hospitals Could Benefit

If the waiver works and more people become insured, lawmakers
are hopeful public hospitals will also benefit from the waiver.
These facilities often receive 50 cents from Medi-Cal for every
dollar spent on patient care. However, they often get nothing from
uninsured patients who show up in their Emergency Rooms. The hope
is that more insured patients will equal more reimbursements for
the hospitals.

Lamirault also says costs for hospitals, and health plan
managers like AAH, will decrease as coordinated care improves. If
more people have coverage, then they will see a doctor before
health problems become catastrophic---and costly.

"I don't know if there will be health care savings immediately,
once the waiver is implemented," Lamirault said. "But the immediate
benefit is that there should be better access and better
coordination of care, and a smarter use of how money that's already
in the system is being used."